Prosecutor Decries `Worldcon'

Federal Attorney Belittles Ex-worldcom Ceo's `Aw-shucks' Defense

March 3, 2005|By Ken Belson, the New York Times

NEW YORK -- In a broad and blistering attack, federal prosecutors accused Bernard Ebbers, the former chief executive of WorldCom, of being caught in a "perfect storm of corruption" that led him to order deputies to commit a multibillion-dollar fraud.

"We all know money can corrupt people, power can corrupt people and pressure can corrupt people," said William Johnson, an assistant U.S. attorney, in the prosecution's closing arguments in the case against Ebbers in federal court in Manhattan. "Money, power and pressure all corrupted Bernard J. Ebbers to commit fraud on a billion-dollar scale," he said Wednesday.

As a result, "WorldCom had truly become WorldCon," he said.

Johnson also took a swipe at the defense's contention that Ebbers was the public face of WorldCom who put together deals and supervised salesmen, but knew little about the technical and financial details of running the company.

"You have been fed the `aw-shucks, I'm-not-sophisticated defense,' " Johnson told the 14-person jury panel. "He treated you no better than ordinary shareholders. He lied right to your face."

He continued, "It insults your intelligence that Ebbers could have built this company up from nothing in 10 years and still be clueless about its financial performance."

Johnson made his comments as the widely watched trial rolls through its sixth week. Ebbers is accused of securities fraud, conspiracy and filing false claims with regulators. He faces a maximum of 85 years in jail on charges he ordered underlings to pump up revenue and hide growing expenses so that WorldCom could meet the company's financial targets.

A big portion of the government's case rests on the testimony of Scott Sullivan, WorldCom's former chief financial officer who said he was ordered by Ebbers to carry out the $11 billion fraud that ultimately bankrupted the company.

Since no one else was present when Sullivan said Ebbers ordered him to commit fraud, defense lawyers took the bold step of letting Ebbers testify in his own defense. On the stand this week, Ebbers said he did not recall the meetings Sullivan said they had and was unaware of the fraud when it was being conducted.

Johnson took 31/2 hours to state his case that Ebbers "lied over and over again and all his lies were criminal." He calmly characterized Ebbers as a general, Sullivan as a lieutenant and the company's accountants as soldiers. Ebbers, he said, ordered "his troops into battle" to commit fraud.

During Johnson's speech, Ebbers, in a dark suit and gold-colored tie, sat largely motionless, his hands folded, his eyes furrowed and his mouth agape.

Ebbers' lawyers will present their closing arguments today, which will be followed by rebuttal statements from prosecutors. The lead defense lawyer, Reid Weingarten, is expected to emphasize how Ebbers had reduced his role at WorldCom by the time the fraud was committed.

He is also likely to stress that Sullivan, who faces 25 years in jail for his role in the fraud, told WorldCom executives in 2002 that Ebbers did not know about elements of the fraud, but that he decided to testify against his former boss in hopes of reducing his sentence.

The jurors are expected to begin deliberations as soon as Friday.

WorldCom filed for bankruptcy in 2002. It emerged in April, using the name of its MCI unit. It's now in the middle of a takeover tug-of-war between Qwest Communications International Inc. and Verizon Communications Inc.